SANTA ANA, Calif., Jan. 28 /PRNewswire-FirstCall/ -- Gary H. Hunt, W.
Brand Inlow, Edward A. Johnson, D. Fleet Wallace and Gary T. Wescombe, the
trustees (the "Trustees") of the G REIT Liquidating Trust (the "Liquidating
Trust"), today announced that G REIT, Inc. (the "Company") transferred its
remaining assets to, and its remaining liabilities were assumed by, the
Liquidating Trust in accordance with the Company's Plan of Liquidation and
Dissolution (the "Plan of Liquidation") and an Agreement and Declaration of
Trust (the "Trust Agreement"). The Company's stock transfer books were
closed as of the close of business on January 22, 2008 (the "Record Date").
The Trustees also announced that the Company filed a Form 15 with the
Securities and Exchange Commission to terminate the registration of the
Company's common stock under the Securities Exchange Act of 1934 and that
the Company will cease filing reports under that act. However, the Trustees
will issue to beneficiaries of the Liquidating Trust and file with the
Securities and Exchange Commission annual reports on Form 10-K and current
reports on Form 8-K.
Upon the formation of the Liquidating Trust, each stockholder of the
Company on the Record Date (each, a "beneficiary") automatically became the
holder of one unit of beneficial interest in the Liquidating Trust for each
share of the Company's common stock then held of record by such
stockholder. In accordance with the Plan of Liquidation, all outstanding
shares of the Company's common stock were deemed cancelled when the assets
and liabilities of the Company were transferred to the Liquidating Trust.
Stockholders were not required to take any action to receive beneficial
interests, and the rights of beneficiaries in their beneficial interests
are not represented by any form of certificate or other instrument. The
Trustees maintain a record of the name and address of each beneficiary and
such beneficiary's aggregate units of beneficial interest in the
Liquidating Trust. Subject to certain exceptions related to transfer by
will, intestate succession or operation of law, beneficial interests in the
Liquidating Trust are not transferable, nor does a beneficiary have
authority or power to sell or in any other manner dispose of any such
beneficial interests.
In addition, immediately before the transfer of the Company's assets
and liabilities to the Liquidating Trust, the Company's operating
partnership redeemed the special limited partner interest held by Triple
Net Properties, LLC in exchange for the right to receive 15% of certain
distributions made by the Company and the Liquidating Trust after the
Company's stockholders have received certain returns, as provided by the
partnership agreement. After the redemption, the Company owned 100% of the
outstanding partnership interests in the operating partnership. The
operating partnership was dissolved in connection with the dissolution of
the Company, and all of its assets and liabilities were distributed to the
Company.
The Liquidating Trust was organized for the purpose of winding up the
Company's affairs and the liquidation of its assets. The transfer of the
Company's assets and liabilities to the Liquidating Trust should preserve
the Company's ability to have deducted amounts distributed pursuant to the
Plan of Liquidation as dividends and thereby not be subject to federal
income tax on such amounts. It is expected that from time to time the
Liquidating Trust will make distributions of its assets to beneficiaries,
but only to the extent that such assets will not be needed to provide for
the liabilities (including contingent liabilities) assumed by the
Liquidating Trust. No assurances can be given as to the amount or timing of
any distributions by the Liquidating Trust.
For federal income tax purposes, on the date the assets and liabilities
of the Company were transferred to the Liquidating Trust, each stockholder
of the Company as of the Record Date was treated as having received a pro
rata share of the assets of the Company transferred to the Liquidating
Trust, less such stockholder's pro rata share of the liabilities of the
Company ("net equity") assumed by the Liquidating Trust. Accordingly, on
that date each stockholder should recognize gain or loss in an amount equal
to the difference between (x) the fair market value of such stockholder's
pro rata share of the net equity of the Company transferred to the
Liquidating Trust, and (y) such stockholder's adjusted tax basis in the
shares of the Company's common stock held by such stockholder on the Record
Date.
The Liquidating Trust is intended to qualify as a "liquidating
(grantor) trust" for federal income tax purposes. As such, the Liquidating
Trust should not itself be subject to federal income tax. Instead, each
beneficiary (formerly stockholder) shall take into account in computing its
taxable income, its pro rata share of each item of income, gain, loss and
deduction of the Liquidating Trust, regardless of the amount or timing of
distributions made by the Liquidating Trust to beneficiaries.
Distributions, if any, by the Liquidating Trust to beneficiaries generally
should not be taxable to such beneficiaries. The Trustees will furnish to
beneficiaries of the Liquidating Trust a statement of their pro rata share
of the assets transferred by the Company to the Liquidating Trust, less
their pro rata share of the Company's liabilities assumed by the
Liquidating Trust so that they may calculate their gain or loss on the
transfer. On a yearly basis, the Trustees also will furnish to
beneficiaries a statement of their pro rata share of the items of income,
gain, loss, deduction and credit (if any) of the Liquidating Trust to be
included on their tax returns.
The state and local tax consequences of the transfer of assets to the
Liquidating Trust may be different from the federal income tax consequences
of such transfer. In addition, any items of income, gain, loss, deduction
or credit of the Liquidating Trust, and any distribution made by the
Liquidating Trust, may be treated differently for state and local tax
purposes than for federal income tax purposes.
The tax summary above is for general informational purposes only and
does not address all possible tax considerations that may be material to a
stockholder of the Company or a beneficiary of the Liquidating Trust and
does not constitute legal or tax advice. Moreover, it does not deal with
all tax aspects that might be relevant to a stockholder of the Company or a
beneficiary of the Liquidating Trust, in light of its personal
circumstances, nor does it deal with particular types of stockholders that
are subject to special treatment under the federal income tax laws. To
ensure compliance with requirements imposed by the Internal Revenue
Service, any tax information contained in this press release is not
intended or written to be used, and cannot be used, for the purpose of (i)
avoiding penalties under the Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any transaction or matter
addressed herein.
Beneficiaries of the Liquidating Trust are urged to consult with their
tax advisers as to the tax consequences to them of the establishment and
operation of, and distributions by, the Liquidating Trust.
This press release contains forward-looking statements that predict or
indicate future events that do not relate to historical matters. There are
a number of important factors that could cause actual events to differ
materially from those indicated by such forward-looking statements. These
factors include, but are not limited to, the following: the Liquidating
Trust may be unable to consummate sale transactions with respect to some of
its assets or such sales may be materially delayed; and the Liquidating
Trust may not be able to complete the liquidation in a timely manner or
realize proceeds from the sales of assets in amounts that will enable it to
provide liquidating distributions to beneficiaries. You should also read
the risk factors that are discussed in periodic reports filed with the
Securities and Exchange Commission, including the risk factors that are
contained in the Company's Form 10-K for the year ended December 31, 2006.
The Liquidating Trust assumes no obligation to update the
forward-looking statements included in this press release. If you have any
questions or require additional information, an investor services
representative is available to assist you at (877) 888-7348 ext. 411 or
email investor-services@1031nnn.com.